On December 16 Congress passed the Tax Increase Prevention Act of 2014, retroactively renewing the Energy-Efficient New Homes Tax Credit for Home Builders. Builders who constructed (or substantially rehabilitated) and sold qualified homes to a buyer in 2014 are eligible for this credit – $2,000 for site built homes, and $1,000 for manufactured homes.
In general, contractors can file for the tax credit if they earned income by completing and selling qualified homes in 2014, and who will file their business taxes on that income. Homeowners are not eligible for this tax credit, because they do not derive business income from building the home.
How to File:
By early February, accredited Home Energy Rating providers will receive updated software that will allow tax credit reports to be produced for homes that qualified in 2014. CET will produce and email the report(s) to those clients who qualified as soon as we receive the updated software. NOTE: It would be difficult to qualify for the tax credit if a home has already been completed but does not already have a Home Energy Rating.
- Homebuilders: To file for earned credit, use IRS Form 8908 (2014 version, as soon as available) and attach the reports from your HERS Rater for each home that MEETS the requirements for the credit.
Synopsis of Legislation:
The federal Energy Policy Act of 2005 established tax credits of up to $2,000 for builders of all new energy-efficient homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards. Initially scheduled to expire at the end of 2007, the tax credit was extended several times, and is now set to expire at the end of 2014.
The home qualifies for the credit if:
- It is located in the United States;
- Its construction is substantially completed before December 31, 2014;
- It meets the energy saving requirements outlined in the statute; and
- It is acquired from the eligible contractor after December 31, 2013, and before January 1, 2015, for use as a residence.
For more information about this credit, refer to the explanation at desireusa.org.